China Looks North: Carving Out a Role in the Arctic

Author: Bree Feng

Approximately 1,500 kilometers south of the Arctic Circle lies China’s northernmost settlement, a snowy village simply referred to as “Arctic village” or “beiji cun.” Although it has no Arctic territory and no history of audacious polar treks, China has steadily increased its voice and engagement in the region, particularly during Canada’s chairmanship of the Arctic Council, which began in May 2013 and concluded on April 24.

Recently, Chinese officials have referred to the concept of becoming a “polar region power.” And while China’s strategic, commercial and scientific interests in the region are not difficult to discern, it is not entirely clear how it will pursue these interests and what the implications might be for Canada. Nonetheless, the contours of China becoming a polar region power are starting to become visible through debates and discussions within China, as well as through its bilateral and multilateral engagement, especially with Russia and Nordic countries.

Becoming a “Polar Power”

China has several obvious interests in the Arctic, including:

Scientific research: To date, China’s engagement with the Arctic has focused mainly on scientific research. [1] China has sought to justify its focus on Arctic issues by emphasizing the global impact of the shrinking ice cap. On its website, China’s Arctic and Antarctic Administration (CAA) tells readers that the country needs to conduct Arctic expeditions because the region “has very obvious practical significance for our climate, environment, agriculture, resource” and other areas.

Resources – The Arctic is believed to be rich in hydrocarbons, water, minerals and fish. It is a veritable “treasure trove of resources,” according to the CAA. But the majority of Arctic resources lie within the undisputed 200-nautical mile Exclusive Economic Zones allocated to the five circumpolar countries by the United Nations on the Law of the Sea (UNCLOS). Although Chinese officials frequently refer to China’s “rights and interests” in the Arctic in Chinese media and on government websites, they have also stated that they respect the sovereignty of Arctic countries and are seeking opportunities to cooperate.

In December, an anonymous State Oceanic Administration official told the Chinese newspaper Guangming Daily that China will continue to strengthen its capacity to undertake polar expeditions, including the completion of its second ice-breaker. Speaking at the Arctic Circle Assembly in Reykavik, Iceland last year, a senior Chinese diplomat told the audience that “China-Nordic Arctic Cooperation is increasingly expanding from research area to economic area, like ship building, shipping, and resource development.”

Shorter trade routes – Melting icecaps in the Arctic have prompted Northeast Asian economies, including China, to take a closer look at the Northeast Passage (or Northern Sea Route) as a possible transport alternative to the crowded Malacca Straits and Suez Canal. The reality of persistent dangers in Arctic waters – floating sea ice, remoteness and additional costs to upgrade ships, to name a few – means the route will probably not be cost-efficient enough to be used until later this century. However, China has indicated interest in exploring the time and cost savings this route could eventually bring.

But beyond these three articulated interests, Chinese intentions are not well understood. Unlike the Arctic littoral countries – Canada, Denmark (via Greenland and the Faroes Islands), Finland, Iceland, Norway, Russia, Sweden and the U.S. – or even other Asian economic powers like South Korea, China has not published an Arctic strategy. Nor has Beijing named a regional “ambassador,” as have the U.S. and Canada, or launched a national program to encourage trade links with the region, like Poland’s “GoArctic” campaign. Nonetheless, some recent statements from well-placed experts are hinting at some priorities, and even some concerns over being left out of discussions regarding the future of the region.

China’s Experts Weigh In

Official reports from government meetings on Arctic affairs indicate that Chinese policy-makers themselves are in the process of formulating what China means by “polar region power.”

Many Chinese academics have called upon their government to urgently devise Arctic strategiesIn the meantime, many Chinese academics have called upon their government to urgently devise Arctic strategies that will allow China to benefit from the region’s potential resource and strategic value. Prominent Arctic scholar Guo Peiqing has argued that China cannot be a “bystander”; Speaking to the Chinese newspaper Quanzhou Evening News last December, after Russia announced it would build a northern radar network, Mr. Guo said the resources and potential strategic value of the Arctic route as an alternative to the “Malacca dilemma,” means that China should be proactive in fighting for and protecting its interests in the Arctic. [2]

Some suggest one way to do this would be to provide additional funding and expertise for expeditions. Speaking to state broadcaster CCTV as it reported China’s new observer status at the Arctic Council (discussed below), a researcher at the Chinese Academy of Social Sciences, a top state-controlled think tank, spoke of the constraints of observer status and expressed concerns that China will be “marginalized” on Arctic affairs. The reporter, concluding the segment, opined that China still “won’t have any real power to influence decision-making” at the Council. “In the future,” he said, “Chinese authorities will be looking to lobby for that influence.”

Chinese officials, most recently the director of the State Oceanic Administration, which oversees polar expeditions, have also linked the country’s Arctic policy to broader foreign policy goals. Liu Cigui, the director, stressed in an editorial last fall that China’s polar policy is intrinsically tied to the national goal of becoming a “maritime power.” This concept, first unveiled by Chinese President Hu Jintao in 2012, has been a foreign policy priority under current president Xi Jinping. In broad strokes, it calls for China to upgrade its comprehensive ability to exert power on the seas, including to better serve its needs in exploiting maritime resources or protecting what it sees as its “rights and interests.”

Creating Openings for Pursuing Interests

Officials and state-controlled media have emphasized the impact of Arctic changes on their environmentWith no territory in the Arctic, one of the key methods for China to pursue its interests in the region is to create political space for itself by emphasizing the global impact of Arctic changes. Officials and state-controlled media have emphasized the impact of Arctic changes on their environment, and have portrayed Arctic waters not as just any body of water, but as a global commons, an interesting contrast to China’s official policy stance on the disputed South China Sea. At the same time, Chinese officials have taken care to emphasize that they respect the sovereignty of Arctic states and have pursued a cautious approach.

More importantly, China has been pursuing its interests through both multilateral and bilateral engagement.

The Arctic Council

In 2013, China became a permanent observer to the Arctic Council (along with India, Japan, Singapore and South Korea), the leading inter-governmental body for Arctic affairs, initiated by Canada in 1996. Becoming an observer was vital for China, because otherwise, in the words of a researcher at a Chinese Ministry of Commerce-affiliated think tank, China would “have to accept policies set by others that may not take China’s interests into account.”

Though observers are not allowed to vote, only to attend meetings and submit proposals, the status provides countries with the platform and legitimacy to influence decision-making – an opportunity that China apparently intends to use. According to the Polar Research Institute of China (PRIC), besides conducting research into Arctic resources and waterways, the organization will also aim to participate in “relevant working group meetings of the Arctic Council and increase China’s influence” in Arctic affairs in coming years. [3]

One of the key forums China is likely to be interested in is the Arctic Economic Council, an independent body of business leaders created during Canada’s recent chairmanship of the Arctic Council. At present, membership is limited to the eight Arctic Council countries and Permanent Participants [4]. However, past attendees have also included members of the energy and mining industries, both areas in which China has invested. China is therefore likely to want to send representatives if membership does open up.

China’s Nordic Engagement

In 2013, China, along with six research institutes from all five Nordic countries, set up the China-Nordic Arctic Research Center in Shanghai to study shipping, resources and polar policy and legislative issues. It has also strengthened bilateral ties with Iceland, Greenland (Denmark) and Norway.

Iceland: In 2012, China and Iceland signed a framework agreement on Arctic cooperation, the first of its kind between China and a Nordic country. Since then, the two countries have inked a free-trade agreement and have broadened their cooperation on resource development, which Iceland hopes will be a new driver in its economy. State-owned China National Offshore Oil Corporation (CNOOC) received a license from the Icelandic government last May to explore for oil in the Dreki area, becoming the first Chinese company to receive a license to explore for oil in Arctic waters, according to CNOOC. Iceland’s strategic location has drawn interest from foreign countries already. Bjarni Benediktsson, Iceland’s Minister of Finance, told audiences at the Arctic Circle last fall: “Sometimes I feel like, underneath the water, I feel like there is a quiet race happening already.” [5]

China-Iceland links had already started attracting international attention in 2011 when Huang Nubo, a Chinese investor with a penchant for poetry and mountaineering, tried to purchase a large chunk of land in northeast Iceland. According to Mr. Huang, he planned to build a massive eco-tourist resort, but the plan was ultimately rebuffed over concerns among Icelanders about the size of the proposed purchase (approximately 300 km). However, this apparently did not dampen bilateral ties with Reykjavik: ties have strengthened as China’s interests have grown, making Iceland’s strategic location an especially attractive option for Arctic shipping.

Greenland: This country within the Kingdom of Denmark is small in population (fewer than 60,000) but rich in minerals, oil and gas – made increasingly viable by melting ice. Recently, a Chinese mining company called General Nice took over a C$2-billion iron ore mine. Some Greenlandic politicians have encouraged Chinese investment. In an interview with China Daily last year, the Government of Greenland's Deputy Foreign Minister Kai Holst Andersen said that his government is in talks with two Chinese companies interested in mining in Greenland. A Danish diplomat also told the paper that his country was willing to work together with China to explore new Arctic sea routes.

Norway: Despite lashing out at Oslo and generally freezing ties after the Nobel Committee awarded the 2010 Peace Prize to Liu Xiaobo, a Chinese dissident who has been imprisoned since 2008, China has allowed CNOOC, one of its state-owned enterprises, to partner with a Norwegian company in Iceland, and is also considering the possibility of collaborating in offshore Norwegian oil exploration.

China and Russia have incorporated Arctic affairs into their recent show of bonhomieRussia: China and Russia have incorporated Arctic affairs into their recent show of bonhomie, with analysts pointing to China getting the better end of recent energy deals as Russia gets battered by Western sanctions. Chinese energy giant PetroChina purchased a 20 per cent stake in the Yamal LNG project for an undisclosed sum. Russia is also set to play an important role in Arctic shipping via the Northern Sea Route, which wraps around its northern coast. Last year, China and Russia issued a joint statement which included a note that Russia will facilitate the shipment of Chinese goods through the Northern Sea Route, as well as its railways and ports.

China sent its first cargo ship through this route in 2013 in a symbolic journey. The state-owned COSCO Group ship arrived in Rotterdam nine days ahead of what the path through the Suez Canal would have entailed, and was met by Chinese diplomats bearing flowers. Speaking at the Artic Circle conference in Reykjavik last October, the company’s vice president, Ye Weilong, said COSCO was “optimistic” about the future of the Arctic Route. Some estimates say that the route can save up to two weeks of travel time compared to sending ships through the Mediterranean and Suez Canal. Sending the ship through the Arctic saved not only time, but also fuel and emissions. But, like other industry players, he gave no indication that this would become a regular occurrence. The company will officially launch the route “in due course,” Mr. Ye said.

What Will China’s Polar Status Mean for Canada?

Canada and China have had limited cooperation on Arctic issues, and the topic has not become as integral to bilateral ties as China’s discussions with Nordic countries. In fact, when a Chinese reporter was excluded from Prime Minister Stephen Harper’s Arctic trip last year, the story made headlines in the Chinese and foreign media. During Harper’s visit to China last fall, the two countries signed a raft of trade agreements including a renminbi clearing service, but there was no mention of Arctic affairs.

There are certain points of congruence between Canada’s Arctic policy and China’s interests, such as natural resource development, scientific collaboration and even, potentially, Arctic tourism.

There are possible pitfalls, of course. Jia Guide, a senior Chinese diplomat with expertise in maritime law, has made statements of public support for Canada’s policies of sustainable and environmentally friendly development in the region. However, with a questionable record of environmental protection at home and accusations of malpractice abroad, it will be up to host countries to ensure Chinese companies comply with relevant regulations.

However, there are also some areas of possible divergence. One of which could centre on the treatment indigenous peoples in the Arctic, whose inclusion and empowerment is a central tenant of Canada’s stated Arctic policy. [6] Arctic Council rules for observers stipulate that countries must express support for the rights of indigenous peoples before they can be granted observer status; however, China was granted this status despite its representatives expressing “no position” on this rule, according to Tony Penikett, a Canadian Arctic Studies scholar and former premier of Yukon Territory. During his remarks, though, Mr. Jia did state that the government will “guide” its private sector to take into account “the interests and concerns of the indigenous people” and the “welfare of the local community.”

In the meantime, Canada-China relations on Arctic issues may soon take a major step forward. The Globe and Mail recently cited the Chinese PRIC director, Yang Huigen, as saying that China wished to build a permanent research outpost in Canada’s North. Mr. Yang quickly denied making such a claim to a Chinese newspaper. However, a Northwest Territories government official later confirmed that China has indeed expressed interest in building a Chinese research outpost in Tuktoyaktuk, N.W.T. or Cambridge Bay, Nunavut.

Overall, we can expect to see an increase in Chinese engagement and investment in the far north in line with Beijing’s increasingly proactive foreign policy abroad. How well host countries will be able to leverage this interest for their own gains will vary, as Chinese officials have gained a reputation for being tough, but pragmatic, negotiators.

Bree Feng is a Beijing-based freelance journalist, formerly with The New York Times China bureau.

[1] At the Arctic Yellow River station, China’s Arctic and Antarctic Administration reports Chinese scientists have conducted research on ionospheric observation, soil carbon-flux and isomer characteristics of perfluorinated compounds, for example. “2013 National Annual Report on Polar Program of China” published by the Chinese Arctic and Antarctic Administration (CAA) in December 2013.

[2] An estimated 80 percent of China’s crude oil imports travel through the Malacca straits. Chinese scholars often cite the dangers of receiving this vital commodity through one route, potentially blockaded by the US, as a reason for the series of overland pipeline construction in recent years. Perhaps because of its resources, the issue of the Arctic and its endless possibilities also periodically became a hot topic among that unique category of foreign affairs commentator in China – retired military commentators, who tend to broadcast hawkish views on foreign affairs issues. In an editorial last September, for example, retired Major General and professor at China’s National Defense University Han Xudong named the Arctic alongside the Pacific and Indian Oceans as centers of the “fiercest rivalry” for “global sea space.” Mr. Han goes on to argue that China is “in the heartland of these oceans” and needs to shore up military power in order to “avoid being squeezed into a passive position.” However, despite their popularity with nationalistic media outlets such as The Global Times, which published Mr. Han’s article, it is not clear if these views are that influential.

[3] According to an article by the director of the institute, Yang Huigen, in China Ocean News last December.

[4] Including organizations representing Arctic indigenous peoples.

[5] China’s construction of an outsized embassy compound in Reykjavik also raised eyebrows. Didi Kirsten Tatlow, “China and the Northern Great Game,” The New York Times, October 5, 2012.

[6] There are three indigenous groups represented by Permanent Participant status with a large population in Canada: Inuit Circumpolar Council, the Gwich’in Council International, and the Arctic Athabaskan Council.